LED lighting leader OSRAM announced a public offer by Bain Capital and Carlyle Group in the United States. Once completed, OSRAM will privatise and withdraw from Frankfurt and Munich stock exchanges in Germany. OSRAM is about to withdraw from the market, reflecting the downturn of LED lighting industry, and means that the LED industry will accelerate to enter the post lighting era, which is also a card opportunity for Chinese led enterprises to face difficulties. OSRAM is the earliest bulb in the world

LED lighting leader OSRAM announced a public offer by Bain Capital and Carlyle Group in the United States. Once completed, OSRAM will privatise and withdraw from Frankfurt and Munich stock exchanges in Germany. OSRAM is about to withdraw from the market, reflecting the downturn of LED lighting industry, and means that the LED industry will accelerate to enter the post lighting era, which is also a card opportunity for Chinese led enterprises to face difficulties.

OSRAM is one of the earliest Bulb Companies in the world. It was integrated by German gas lamp company and Siemens a hundred years ago. It has been called the four LED lighting enterprises in the world with Philips, Ge, Cree (Kerui).

At present, LED lighting industry is affected by the economic recession, especially the decline of automobile market, resulting in overcapacity and price decline, and the whole industry is in the dilemma of stagnation of growth. On the one hand, OSRAM is challenged by the emerging led enterprises in China, on the other hand, its new business such as intelligent vehicle lidar needs to be cultivated, which makes its after tax net profit of fy18 fall year on year and the net profit loss after tax in the fourth quarter is 5million euros. Finally, after six years of split and listing, OSRAM will enter the exit channel of privatization.

Olafberlein, chief executive of OSRAM, said Bain Capital and Carlyle Group were the most appropriate partners to appear at the right time. Under the offer, OSRAM shareholders will receive cash of 35 euros per share, with a premium of 22.6 per cent compared to the weighted average price of the transactions over the past three months. The offer is valid until the beginning of September this year, only 70% of the shares will be acquired to be successful. As soon as Friday's news came out, OSRAM's share price rose 12 percent on the same day.

"Berlain has found a background to recognize his strategy and doesn't have to be stared at by the current shareholders every day." An LED industry analyst commented. However, some LED industry observers believe that the people who play capital are paying attention to the interests. After auslong embraces private equity, it is necessary to see if OSRAM can stick to the existing strategy. After all, the profit has declined.

In fact, the global LED lighting industry is declining. In 2018, GE company of the United States sold Ge lighting business in Europe, the Middle East, Africa and Turkey, as well as the global automotive lighting business; Philips formally "delimited" the lighting business last year, and Philips Lighting has been renamed "signify" for one year; Cree also announced the sale of its lighting products business this year.

LED and LED lighting this road, how to go? OSRAM officials said that there will be no major organizational structure changes in the short term, and will continue to transform to a high-tech photoelectric leader.

According to the plan, OSRAM will become a leading enterprise in the field of Photonics and Optoelectronics by 2020. Previously, OSRAM has sold traditional light source business to Chinese company mullinson, and its lighting business (siteco) and service business in the United States (the Xi Wan lighting solution), which is more and more unlike a lighting enterprise, even the bulb shape in brand logo has been removed.

Currently, OSRAM focuses on three key strategic businesses: optoelectronic semiconductor, automotive lighting and digital application.

The strategy is very good, and it needs to be seen to be implemented in detail. Zhang Hongbiao, an observer in LED lighting industry, believes that after OSRAM divested from traditional lighting business, he has invested a lot in plant lighting and special lighting fields, but after all, it is a small market, which is difficult to support the scale growth of OSRAM. LED lighting industry has been mature and entered the era of micro profit, which is a greater opportunity for Chinese enterprises.

In contrast, San'an optoelectronics, the leader of LED chips in China, has also seen a decline in growth in recent years, but business development is still positive, from mini/microled to automotive lighting. More importantly, San'an optoelectronics is also stepping into the emerging business cultivated by OSRAM, including RF front-end chips and optical communication applied to intelligent mobile terminals.

Of course, San'an photoelectric and OSRAM still have a big gap in "volume". OSRAM's revenue in fy18 was 4.1 billion euros (about 32billion yuan), while Sanan Optoelectronics in 2018 had revenue of 8.36 billion yuan, only about a quarter of that of OSRAM.

According to Wang Fei, director of China research at ledinside, the privatization of OSRAM is not a sudden move. OSRAM has always attached importance to R & D investment, but the capital market pays more attention to the short-term financial performance of enterprises, which will have a conflict relationship in the short term, so privatization becomes one of the options“ For Chinese companies, the future opportunity is that if OSRAM reorganizes and splits after privatization and sells a part of its non strategic assets to the outside world, it is expected to participate in the purchase. Of course, if OSRAM's core business is sold, it will be a better choice for Chinese companies, but the probability of European government review will be greater. "